A label, what for?
By international standards, the French are big savors. But they have limited trust in banks and insurance companies who manage their savings. Social finance being rather specific and novel, the French savor is entitled to know to what use his money is put. For this reason, the founders of Finansol were easily convinced of the need for a means of recognition of social investments their members promoted, with respect to more traditional investment plans or savings schemes.
The Finansol label was introduced in 1997 to enhance the various ways of approaching solidarity finance through vehicles open to the general public. It is not granted to the associations, cooperatives, companies or asset managers who promote or manage these vehicles.
A trustworthy label
The label is granted by an independent 12-member committee. The members are chosen on the basis of their knowledge of personal finance in general and of social finance in particular. The Finansol association has no control over their decisions.
The label is granted on the double basis of transparency and solidarity.
Thanks to the label, the individual savor knows that all of his savings or a certain proportion – it depends on the fund –serve directly or indirectly to finance outfits that are focused on issues such as access to jobs or housing, clean energy and organic food production, fair trade or small business in developing countries. He is also assured of a regular flow of information from his financial intermediary.
The label’s regulations apply to any given solidarity investment. The two main criteria are:
If the investment is made through a mutual fund or a life insurance policy, 5 to 10% of the fund’s assets must be invested in social businesses. The remaining 90 to 95% must respect ESG criteria. In the case of solidarity savings accounts or term accounts, at least 25% of the interest payments must be granted on an annual basis to an NGO.
- Transparency and information
A correspondant is made available by the investment managers to give the investors all the necessary information they might request. The correspondant is in touch with the Finansol team on a regular basis.
Other secondary criteria such as management fees, volume objectives or promoter support are also accounted for. Financial return on investment is not a criterion.
The number of social vehicles has increased regularly over the years It currently exceeds 120. The label committee has constantly reinforced its regulations. In 2012, nine vehicles were delabelized by the committee, most of the time because their managers had ceased to promote them.